Mixed news coming out from Financial Executives International showing that Section 404 compliance costs with Sarbanes-Oxley are headed south. Well, kind of.

According to the press release, total average costs for compliance with Section 404 was $2.9 million for fiscal year 2006, down 23 per cent on 2005.

That's the good news.

The survey also showed that companies still required an average of 18,070 people hours internally to comply with Section 404 in 2006. That's a 10 percent decrease from the previous year. But it's still a lot of hours of mind-numbingly tedious work.

Only one in five (22 per cent) agreed that the benefits of Sarbanes-Oxley exceeded the costs and 78 per cent said costs exceeded benefits.

And the worrying part is that audit fees are not really going down.

If there is an upside to this report, it's that 60 percent of accelerated filer companies agreed that compliance had produced more investor confidence in their financial reports, 46 percent agreed that financial reports were now more accurate, 48 percent said they were more reliable and 34 percent agreed that compliance with Section 404 has helped prevent or detect fraud.

Which suggests that whatever the costs, the law might be helping to protect investors. But business leaders would ask whether it's a price worth paying and whether they could afford it. This survey is unlikely to give them much comfort.